What is your company’s level of embracement of embedded insurance? Most likely it is not high, as it is an overly complex IT process to set up a new partnership. But it is worth prioritizing – according to Simon Torrance, by 2030 embedded P&C insurance is estimated to the value of $700 billion.
The main driver of complexity for most insurance legacy systems is that they were developed without the capabilities of embedding insurance – they were made for batch processing (e.g. exchange of bank files, transactions, etc.), not to interact online instantaneously with web applications, mobile applications and other digital channel’s.
NCDC has been developing core insurance systems globally for over 20 years. Two main options we have successfully been implementing and find beneficial for insurers with legacy systems are:
Developing a service layer for legacy system
Developing a service layer allows communication between legacy system and the partners’ solutions. In comparison with migration, it has the following attributes:
Advantages:
Disadvantages:
Migrating to a modern core system with dedicated APIs enables easier exposition for embedding products with partners solutions.
Compared with developing a service layer, the following attributes apply:
Advantages:
Disadvantages:
In summary we find that it is most important to choose the technology which best supports long term business objectives. If embedding your insurance products with multiple partners is one of the objectives, we recommend the solution adopted is the one that has the most possibilities of connecting with future technology.
References: https://www.linkedin.com/pulse/embedded-insurance-3-trillion-market-opportunity-could-simon-torrance/